The Petroleum Development Act 1974 remains in force, with Petronas retaining exclusive rights to explore and exploit Malaysia’s petroleum resources, the government confirmed. Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said said the act vests Petronas with ownership of petroleum and the exclusive powers to explore, exploit, and acquire it both onshore and offshore.
She stated this in a written reply to Hassan Abdul Karim (PH–Pasir Gudang), who asked how far the federal government would defend the act as a pillar of the nation’s economic sovereignty in the oil and gas sector, amid challenges from the Sarawak government and Petroleum Sarawak Bhd (Petros).
In a separate written reply, Azalina revealed that contracts awarded to Sabah-based companies by Petronas had more than tripled since the signing of the Commercial Collaborative Agreement (CCA) in 2021, rising from RM613 million in 2021 to RM2 billion in 2024, benefiting 326 licensed Sabah vendors. She said Sabah’s participation in the industry had also grown, with Petronas increasing natural gas supply to Sabah Energy Corporation Sdn Bhd (SEC) from 104 million standard cubic feet per day (MMscf/d) to 224 MMscf/d in 2025, of which 150 MMscf/d was allocated to Esteel at Sipitang Industrial Park.
Responding to Datuk Seri Dr Jeffrey Kitingan (GRS–Keningau), who sought updates on agreements for the return of oil and gas rights and revenue sharing similar to Sarawak’s, Azalina said the CCA had strengthened Sabah’s role through greater involvement of state-owned firms like SEC and SMJ Energy Sdn Bhd (SMJE). SMJE has also secured a 25% equity stake in the ZLNG project and is participating in a Technical Exploration Agreement in the Layang-Layang Basin.
Signed on Dec 7, 2021, the CCA allows Sabah greater revenue sharing, participation, and a say in oil and gas matters through a consultative framework with Petronas, while safeguarding the state’s legal rights, according to Sabah’s Chief Minister Datuk Seri Hajiji Noor.
